Treasury advises that tenders have not stopped
16-05-2022
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Taranis
Source
National Treasury has issued a notice advising that all organs of state are to continue issuing tenders and requests for quotations (RFQs), as well as inviting them to apply for an “Exemption” from the provisions of the Preferential Procurement Policy Framework Act of 2000 (PPPFA).
Confusion reigned at the end of February 2022 when Treasury issued a cautionary note to organs of state, which included a guidance to stop issuing tenders in lieu of the Constitutional Court ruling, which declared the 2017 PPPFA Regulations, as invalid.
This was followed up by another note stating that the earlier one was merely an advisory note and not an instruction to organs of state, to stop issuing tenders.
The second note also advised organs of state that they could apply to the Minister of Finance to be “Exempted” from the provisions of the Act and implement their own procurement policies, which means that tenders could be considered, based on price only.
However, an organ of state may only apply price and transformation goals, if these are clearly spelt out in its procurement policy and it can’t use any criteria in an arbitrary manner, so to say.
National Treasury stated that it appreciates the urgency of these “Exemption” requests, and once the Minister has granted the approval, it will be communicated to the organ of state within 72 hours of the decision.
The “Exemption” granted to the individual organ of state will remain in place until the Constitutional Court has provided clarity as to whether the 2017 PPPFA Regulations still enjoy a “window period” of twelve months since the ruling in February 2022 or when National Treasury promulgates the recently released Draft 2022 PPPFA Regulations.
According to Gerrit Davids, Lead Advisor at TaranisCo Advisory, tendering agency, “It is incumbent upon bidders for public sector tenders to establish from the respective organ of state as to whether it has received an “Exemption” from Treasury under Section 3 of the PPPFA of 2000 and if so, to provide the bidder with a copy of their procurement policy to assess as to which criteria are allowed, to be used in their tenders.”
“In essence, bidders must also query any current tenders, which include the 2017 Regulations like “Pre-qualification”; a demand for “sub-contracting”; “Functionality”, “Local Content and Production”; as well as references to the R50m threshold for either the 80-20 or 90-10 point systems respectively, since these have been declared invalid by the Constitutional Court in February 2022”, says Davids.
To receive a synopsis of the draft regulations, send an email to: draftbill@taranisco.co.za
For any further queries around the draft regulations or submitting comments, contact Gerrit Davids | Lead Advisor | TaranisCo Advisory CC | E-mail: gerrit@taranisco.co.za | Cell. 082 496 1657
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